earnings estimates have been revised upward over the past 30 days, reflecting analysts’ optimism surrounding the stock. The Zacks Consensus Estimate for fiscal 2023 and 2024 earnings has moved up 0.2% and 0.2%, respectively, during the said period.
Atmos Energy gains from industrial customer additions and constructive rate outcomes. The reopening of economic activities and the availability of vaccines will increase demand from the non-residential group and boost its performance.
Let’s focus on the factors that make Atmos Energy a good investment option at the moment.
Debt to Capital
Atmos Energy’s Debt to Capital is currently pegged at 37.9% compared with the industry average of 50%, indicating that it is using lesser debts compared with its industry peers. Lower usage of debt in a rising interest rate environment will allow the company to boost its margins.
The times interest earned ratio of Atmos Energy at the end of fiscal 2022 was 9.3, which indicates that the company has enough financial strength to meet its debt obligations.
Strong Investment Plan
Atmos Energy has well-chalked plans to invest in and strengthen its infrastructure. Atmos Energy is planning to invest $15 billion from fiscal 2023 through 2027, out of which more than 85% will be allocated to enhance the safety of the existing operations. The planned investment will result in 6-8% annual earnings growth during the said period.
Long-Term Growth and Dividend Yield
The company’s long-term (three- to five-year) earnings growth is projected at 7.48%, courtesy of well chalked-out capital investment plans, with more than 90% of Atmos Energy’s annual capital investments starting to earn returns within six months and nearly 99% within no more than 12 months.
Its current dividend yield is 2.64% compared with the Zacks S&P 500 composite’s average of 1.68%.
In the past year, Atmos Energy’s shares have gained 5.4% compared with the
s growth of 4%.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
Atmos Energy currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here
The long-term earnings growth of ALLETE, MDU Resources and Global Water Resources is projected at 9.3%, 5.7% and 15%, respectively.
The Zacks Consensus Estimate for 2022 earnings for ALLETE, MDU Resources and Global Water Resources has moved up 0.3%, 0.6% and 5%, respectively, in the past 60 days.
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